BILL NUMBER: SB 537	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Cannella

                        FEBRUARY 26, 2015

   An act to add Sections 17239 and 24356.9 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 537, as introduced, Cannella. Income taxes: deductions: amounts
due on real property tax bill.
   The Personal Income Tax Law and the Corporation Tax Law authorize
various deductions in computing income that is subject to tax under
those laws.
   This bill would allow a deduction, under both of those laws, of
amounts paid by the taxpayer on the taxpayer's real property tax
bill. The deduction under the Personal Income Tax Law would be an
itemized deduction.
    This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) It is a well-established federal position that a deduction for
personal property taxes is allowed to the extent the taxes are based
upon the assessed value of the property, also known as ad valorem
taxes, under Section 164 of the Internal Revenue Code.
   (b) It is also a well-established federal position that a
deduction for real property taxes is not limited to ad valorem taxes
under Section 164 of the Internal Revenue Code.
   (c) The Internal Revenue Code limits a deduction for personal
property taxes to ad valorem taxes, but no such limitation applies to
a deduction for real property taxes.
   (d) It has been concluded that assessments under the Mello-Roos
Community Facilities Act of 1982 and certain other special taxes in
California are deductible under Section 164 of the Internal Revenue
Code even though they are not based upon the assessed value of the
property.
   (e) California law conforms to the federal law described in
subdivisions (a) to (d), inclusive, and California taxpayers are
currently deducting taxes that are not based upon the assessed value
of the property.
   (f) California is in a unique position with respect to the number
of taxpayers subject to assessments under the Mello-Roos Community
Facilities Act of 1982 and certain other special taxes, and
California taxpayers have a right to protect their current property
tax deduction.
  SEC. 2.  Section 17239 is added to the Revenue and Taxation Code,
to read:
   17239.  For each taxable year beginning on or after January 1,
2015, there shall be allowed as an itemized deduction the amount paid
by the taxpayer for the amount due on the taxpayer's real property
tax bill, including, but not limited to, real property taxes,
personal property taxes, special taxes, special assessments, fees, or
other charges.
  SEC. 3.  Section 24356.9 is added to the Revenue and Taxation Code,
to read:
   24356.9.  For each taxable year beginning on or after January 1,
2015, there shall be allowed as a deduction the amount paid by the
taxpayer for the amount due on the taxpayer's real property tax bill,
including, but not limited to, real property taxes, personal
property taxes, special taxes, special assessments, fees, or other
charges.
  SEC. 4.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.